Air Arabia Airbus order might not be enough: exec


Low-cost carrier Air Arabia has ordered 44 Airbus aircrafts over the next five years, but its expansion plans mean it could need more, a senior company executive said.

After a rocky year for the airline industry in which the company recorded its first quarterly profit drop, Air Arabia’s Chief Operating Officer for Morocco Rohit Ramachandran told Reuters the company was happy with its recent performance.
“At our parent company in Sharjah, we regularly exceed 82 to 83 percent seat factor even in a difficult year like 2009,” he said in an interview. “I think it was in the early 80s (for the full year) but the final figure will be released later.”

Seat factor shows how successfully an airline fills its planes. Ramachandran noted the industry climate was probably the worst ever last year, but stressed that Air Arabia had not veered from its focus on profits first.

The largest Arab airline by market value began operations from Sharjah in the United Arab Emirates and opened a second hub in Morocco last year. It is launching a new budget carrier with an Egyptian partner and setting up a third hub in Alexandria.
“If anything (the Airbus deliveries) won’t be able to keep up with our requirements for the three hubs,” Ramachandran said at the Moroccan Travel Market in Marrakesh. “At least in the next couple of years we see our demand for airplanes outstripping the schedule.”
“We might even have to go outside. But we are in a good position right now because good airplanes are available cheap.”

He said Air Arabia Maroc, which flies from Casablanca to mostly European destinations, hoped to begin services to West Africa this year if regulatory hurdles are overcome.

West Africa has some of the highest air fares per kilometre in the world as only a few carriers have take-off and landing rights and competition is scarce.

Morocco’s government “has been very supportive so we are hopeful that we will be able to begin services into West Africa at some point in 2010”, Ramachandran said.
“We also plan this year to start operations to Tunis, Tripoli, Egypt and so on.”

Air Arabia has 100% management control over its Moroccan arm but shares ownership with Bahrain’s Ithmaar Bank and a group of Moroccan investors including Holmarcom and banker Othmane Benjelloun’s

Ramachandran said he planned to add two planes to the airline’s Casablanca fleet this year and, if market conditions permit, would then add three planes a year to reach 17-20 planes, rivalling the Sharjah operation in scale.
“That is not counting expansion if we position planes in other cities in Morocco,” he said. “It’s a matter of time before we start doing that.”

He said the tourist city of Marrakesh was a clear candidate.

Air Arabia said in November its third-quarter profit fell 9% due to the global H1N1 flu virus pandemic and the fasting month of Ramadan, and forecast that the difficult market conditions would extend into the second quarter of 2010.

Pic: Ari Arabia Airbus 320